RBI constitutes Committee on functioning of Asset Reconstruction Companies

Reserve Bank of India (RBI) on Monday constituted a six-membered committee on the functioning of Asset Reconstruction Companies (ARCs) and review of regulatory guidelines applicable to them.

Reserve Bank of India (RBI) on Monday constituted a six-membered committee on the functioning of Asset Reconstruction Compes (ARCs) and review of regulatory guidelines applicable to them.

"As part of the Statement on Developmental and Regulatory Policies released along with the Monetary Policy Statement on April 7, RBI had announced setting up of a committee to undertake a comprehensive review of the working of ARCs in the financial sector ecosystem and recommend suitable measures for enabling such entities to meet the growing requirements of the financial sector," said the RBI's notification.

RBI appointed Sudarshan Sen, former Executive Director of RBI as the Chairman of the committee.

The other five members of the committee are-- Vishakha Mulye, Executive Director, ICICI Bank; PN Prasad, former Deputy Managing Director, RBI; Rohit Prasad, Professor of Economics, MDI, Gurugram; Abizer Diwanji, Partner, Ernst and Young; and R Anand, Chartered Accountant.

RBI said the committee will do a review of the existing legal and regulatory framework applicable to ARCs and recommend measures to improve the efficacy of ARCs, along with the role of ARCs in the resolution of stressed assets including under the Insolvency and Bankruptcy Code (IBC), 2016.

It will also give suggestions for improving liquidity in and trading of security receipts, and give a review of business models of the ARCs.

RBI said the committee will also look at any other matter relevant to the functioning, transparency and governance of ARCs.

"The Committee will submit its report within three months from the date of its first meeting. Department of Regulation. Reserve Bank of India will provide the necessary secretarial support to the Committee," it added.

( With inputs from ANI )